OK its a high time i outlined my forex trading strategy first of all i would like to say it outright that im a trend trader, as trading with the trend gives you more bang for your buck. for newbie traders its important to note that there are three types of markets; trending ,directionless or rangebound, and volatile markets.When devising a strategy you should put into consideration what type of market action that you are trying to capture
the simlest strategies usually the best strategies sually complicate their trading strategies and usually end up confused and as a result end up loosing alot of money in the forex and futures markets. for my trend following strategies i decided to use moving averages, as they are a study that is derived from price action. in my case i use the 55 exponential moving average or ema to setup the trade for either a long a buy setup or a short a sell setup. In principle, when price closes above the 55ema, ill be looking to buy, when price closes below the 55ema ill be looking to sell. that is how the setup looks like. for the entry use 3other emas. namely the 7,14,and 21 emas respectively. Basically, when the>7ema >14ema >21ema i pull the trigger for a buy, provided price is above the 55ema (remember the setup).When the 7ema<14ema<21ema i pull the trigger for a sell, provided price is below the 55ema. When such conditions occur in any market, my bias is usually fully bullish or bearish.
i usually look to exit a buy when the 14ema crosses the 7ema. i have this strategy condensed into an indicator. i have backtested this strategy on alot of currency pairs and indices and the strategy is amazingly profitable! i have also forward tested the strategy for over 7months since may 2010 and the results are impressive to say the least! since the purpose of this blog is to journal any trade that i take with my strategy, ill share atrade setup that i took on a hour gold chart
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